COMMISSIONER OF INCOME TAX vs. DHIRUBHAI R. DESAI

O/TAXAP/138/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 138 of 2006

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX....Appellant(s) Versus DHIRUBHAI R. DESAI....Opponent(s) ================================================================ Appearance: MR MANISH BHATT, SENIOR ADVOCATE WITH MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1 MR MANISH J SHAH, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and Page 1 of 4

O/TAXAP/138/2006 JUDGMENT HONOURABLE MR.JUSTICE K.J.THAKER

Date : 11/12/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. The Revenue has filed this appeal u/s.260A of the Income Tax Act, 1961 (for short, the Act) being aggrieved by and dissatisfied with the order passed by the Income Tax Appellate Tribunal (for short, the ITAT) in I.T.A. No. 102/Ahd/2004 dated 22.03.2005. 2. While admitting the appeal on 29.08.2006, the following substantial question of law came to be formulated; Whether, the Appellate Tribunal is right in law and on facts in holding that no assessment u/s 147 read with Section 143(3) can be made if the notice u/s. 143(2) of the Act is not served within the time prescribed by proviso u/s. 143(2) of the Act? 3. Mr. Manish Bhatt, learned Senior Standing Counsel appearing with Ms. Mauna Bhatt, learned Standing Counsel for the Revenue submitted that this Court in the case of Commissioner of Income-tax – III vs. Panorama Builders (P.) Ltd reported in [2014] 224 Taxman 203 (Gujarat) wherein identical issue was raised held that section 292BB of the Act is only confined to service of notice and does not apply to issuance of notice, neither it cures defect or enlarges statutory period where a mandatory notice under section 143(2) is required to be issued within limitation fixed under the Act. Page 2 of 4

O/TAXAP/138/2006 JUDGMENT 4. Mr. Manish Shah, learned advocate appearing for the assessee on the other hand submitted that the issue is squarely governed by the decision of this Court dated 25.11.2014 rendered in Tax Appeal No. 1020 of 2006 in the case of ITO vs. Baroda Cricket Association wherein this Court has held as under: “4. Learned advocate appearing for the appellant in all these appeals has pointed out that the proviso to section 148(1) inserted by the Parliament on 28.2.2006 in the IT Act, provides that notice issued after 12 months but before the completion of assessment/reassessment in respect of the return u/s. 148 furnished during the period from 1.10.1991 to 30.9.2005 shall be deemed to be a valid notice. In that view of the matter, the matter is required to be considered in light of the amended provisions. Ld. Advocate for the respondent has submitted that in view of the amendment, the matter is required to be remitted back to the CIT(A) for reconsideration. Hence, in view of the amended provisions, we are of the opinion that the matter is required to be re- considered by both the authorities after considering the factual matrix of the matter and amended provisions. “ 5. Learned counsel for both the sides submitted that considering the law laid down by this Court, the matter may be remanded to the Tribunal for reconsideration in light of the aforesaid decisions and as the CIT(A) has allowed the appeal on this ground alone. Para 4.3 & 4.4 of the CIT(A)’s order reads as under: 4.3 From the above, it is clear that the notice u/s. 143(2) which was required to be sent by 31.1.2002 was not sent within that time. Instead it was served only on 26.3.2002. Therefore, the Page 3 of 4

O/TAXAP/138/2006 JUDGMENT requirements of the proviso to section 143(2) have not been met. The A.O. could not have framed the assessment u/s 143(3) in such circumstances. 4.4 Hence the assessment framed is bad in law and therefore void and accepting the appellant’s ground of appeal, the same is hereby annulled. 6. We have heard learned counsel for the parties and have perused the record of the case. Considering the issue involved in the present appeal and the decisions cited hereinabove, we think it fit to remand the matter to the Tribunal, who shall consider the issue afresh in light of the said decisions and the provisions of law and shall render decision, after considering the contentions raised by both the sides on all grounds raised before the CIT(A) also. The Tribunal shall decide the issue afresh without being influenced in any way by the observations made by the earlier Bench of the Tribunal as also by this Court. We have not entered into the merits of the matter. As the matter is being remanded we do not answer the question raised in the present appeal. With the above observations, the appeal stands disposed off. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 4 of 4